Light olefins
Overview
The global light olefins market is made up of ethylene and propylene monomers. These product markets can be affected by a great many factors.
Ethylene is the most widely used commodity chemical and is produced globally in all major regions. It is converted into many products used in daily life like plastic packaging, durable goods, hygiene products and other consumer items. The ethylene market is driven primarily by regions of low production cost and regions of high demand growth. Polyethylene, ethylene’s largest derivative, represents about 65pc of global ethylene demand. Anyone involved in the ethylene industry – directly or indirectly – needs market and pricing insight to anticipate supply shortages and potential swings in pricing.
Propylene is the second most widely used commodity chemical and is produced globally in all major regions. Propylene is a volatile commodity because of its predominantly co-product nature and unpredictable supply, but recently the industry has been trending to more on-purpose production. It is converted into many products used in daily life like plastic packaging, durable goods, automotive products, and woven fabrics. Polypropylene, propylene ’s largest derivative, represents about 70pc of global propylene demand. Anyone involved in the propylene industry – directly or indirectly – needs market and pricing insight to anticipate supply shortages and potential swings in pricing.
Our light olefins experts will help you determine what trends to track and how to stay competitive in today’s ever-changing global market.
Latest light olefins news
Browse the latest market moving news on the global light olefins industry.
EU parliament pushes through packaging law
EU parliament pushes through packaging law
Brussels, 26 November (Argus) — EU ministers are likely to approve the bloc's Packaging and Packaging Waste Regulation (PPWR) in December, allowing for its entry into force early in 2025. This follows the European Parliament today signalling the end to its so-called corrigendum procedure. No substantive changes to the legal text were made to the PPWR during the procedure. Martin Engelmann, director-general of German plastic packaging association IK, along with 20 German industry associations, had urged European Commission president Ursula von der Leyen to remove the "failed" reusable packaging requirements for industrial and commercial packaging. The PPWR will oblige packaging reductions of 5pc by 2030, 10pc by 2035 and 15pc by 2040 . The rules state all packaging placed on the EU market shall be recyclable. The legal text defines 'recyclability' as packaging's compatibility with waste management and processing using separate collection and sorting, recycling at scale and use of recycled materials to replace primary raw materials. The regulation specifies that end-of-waste materials used as fuels or to generate energy shall not be counted as recycled. The commission originally proposed the regulation in November 2022. EU elections in June 2024 held up formal adoption. EU ministers still have to formally approve the legal text, which should take place on 16 December. That would allow entry into force early in 2025. By Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Chancay Port takes center stage at APLA
Chancay Port takes center stage at APLA
Sao Paulo, 25 November (Argus) — The new $3bn Chancay Port in Peru could disrupt polymers trade throughout Latin America, according to conversations at the 44th Latin American Petrochemical Association (APLA) conference last week in Cartagena, Colombia. Located 80km north of Lima, the Chinese-built port promises to reduce shipping times for Chinese products to the region by up to 20 days, thanks to its direct route across the Pacific Ocean. Chinese President Xi Jinping inaugurated the port in Peru on 14 November. The port was a focal point of discussions among producers and traders in Latin America, but especially for those in the west coast of South America (WCSA), the first region to be possibly affected by Chancay's operations. A polypropylene (PP) producer in Colombia told Argus that the news is not good for them as it would be easy and fast to ship Chinese PP from Chancay to Buenaventura, Colombia's most important seaport on the Pacific Ocean. The company said it is trying to figure out how to deal with the expected increase in resin imports from China. Several other regional resin producers and traders are closely monitoring the situation, trying to strategise their next moves. In the US, the largest polyethylene (PE) exporter to South America, Chancay has already been causing concerns for local producers and traders selling into the region, one source told Argus . The combination of more Chinese PE arriving on South American shores and local governments placing anti-dumping duties on US-produced, as is foreseen in Brazil in the short-term, should lower US sales for the whole region, the source added. Asian resin is already gaining market share in Peru. Currently, the country is the second largest PP importer in South America by volume, and its imports had a significant increase this year even before Chancay's inauguration. PP imports climbed 32pc from January to October, with 90pc more purchases from Asia-Pacific, whose market share expanded from 41pc to 58pc year on year. South American purchases fell 7pc to 57,800t in the same period. Concerns were also raised about the Chancay port being used to distribute Chinese resins to other regional markets, including Brazil and Argentina, via smaller containerships being sent through the Panama Canal. Chancay set to change routes The first phase of the Chancay Port project, which began in 2021, features four berths and a maximum depth of 17.8 meters, allowing it to accommodate ultra-large container ships with capacities of up to 18,000 twenty-foot containers (TEUs). With a projected throughput capacity of 1mn TEUs annually in the short term and 1.5mn TEUs in the long term, Chancay Port is set to significantly impact maritime routes from Asia to Latin America. Over 80pc of the project is already completed, including the main quay structures finished earlier this year. Once fully operational with its 15 docks, Chancay will be South America's first port capable of handling ships too large for the Panama Canal. Additionally, China plans to build a railway linking Chancay with Brazil, its largest Latin American trade partner, later in the decade. The ownership of Peru's Chancay Port is split between two major entities. Cosco Shipping Ports, a Chinese state-owned company, holds a 60pc stake in the port. The remaining 40pc is owned by Volcan Mining Company, a Peruvian firm. This collaboration is part of China's expansive Belt and Road Initiative. By Fred Fernandes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Brazil starts US, Canada PE-dumping probe
Brazil starts US, Canada PE-dumping probe
Sao Paulo, 14 November (Argus) — Brazil's government has started an anti-dumping investigation into polyethylene (PE) produced in the US and Canada. The country's foreign trade committee Gecex launched the investigation on 13 November following allegations from the sole Brazilian PE producer, major petrochemical company Braskem, that these countries are exporting PE to Brazil at prices below what is considered fair market value. Overall imported PE prices into Brazil have been in a downward trend since July, pushing down Braskem prices in the domestic market. Gecex said it will analyze export prices and compare them with those in the domestic markets of both countries. If dumping is confirmed, corrective measures may be applied to protect the Brazilian industry. A preliminary analysis has identified significant evidence of dumping, justifying the continuation of the investigation, Gecex said. It added that there was a considerable increase in PE imports from these countries — especially from the US — during the period being investigated, which may have contributed to the decline in domestic prices and harmed the domestic producer. The preliminary analysis of dumping evidence covered 1 April 2023 to 31 March 2024. The damage analysis period extended from 1 April 2019 to 31 March 2024. The anti-dumping investigation into PE imports from the US and Canada was preceded by an increase in import taxes on a number of polymers and chemicals to 20pc from 12.6pc, including PE, polypropylene (PP) and polyvinyl chloride (PVC), effective since 15 October. Repercussions An international trader specializing in polymer imports into Brazil told Argus that if anti-dumping duties are applied, his company's PE imports from the US to Brazil could drop by 20-30pc. "The decision has a 10-month deadline to be presented, but I believe it will be implemented and possibly announced earlier," he said, adding that this is another Braskem maneuver to regain its traditional 70pc market share in the Brazilian market. If confirmed, the measure is expected to have a significant impact on the Brazilian economy, especially on the plastic products manufacturing industry, as imports of finished plastic products could rise substantially, the trader said. One US-based trader selling US and Canada PE into Brazil sees the possible application of anti-dumping measures on the products as a structural development. "We will need to source PE in different production regions such as Asia and the Middle East, developing new ways of logistics, cash flows, ways of payment, to make it work flawlessly as it currently works with North American PE," the trader told Argus . "Prices should go up and we will increase our margins on PE sales." Brazil's January-September PE production increased by 1pc to 1.7mn t from the same period in 2023, while domestic sales fell bu 2pc to 1.24mn t. In contrast, PE imports jumped by 45pc to 1.54mn t, resulting in an apparent consumption of around 2.8mn t, up by 20pc higher year-on-year and a record high. By Fred Fernandes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Japan’s Sekisui to raise Thai CPVC compound output
Japan’s Sekisui to raise Thai CPVC compound output
Tokyo, 12 November (Argus) — Japanese petrochemical producer Sekisui Chemical plans to boost its chlorinated polyvinyl chloride (CPVC) compounds output capacity in Thailand during October 2025-March 2026 as demand in Asia, especially India, and the Middle East grows. Sekisui Chemical's Thai subsidiary Sekisui Specialty Chemicals Thailand aims to build a CPVC compounds production plant in Rayong. The new plant is expected to raise the total output capacity of CPVC compounds by 1.6 times. Sekisui Chemical targets start-up of the new plant by the end of March 2026. The firm declined to disclose detailed capacity and investment figures. Sekisui Chemical has 60,000 t/yr of feedstock CPVC production capacity in Thailand. CPVC compounds are generated by blending CPVC and additives. The company does not plan to boost manufacturing capacity or procurement volumes of CPVC. The producer said it can boost CPVC compound production without raising the supply of CPVC for now. The announcement of planned increases in CPVC compound capacity in Thailand follows the launch of the firm's new office in India in June. The company expects demand for its CPVC compounds to increase further as metal pipelines have been replaced with CPVC resin pipelines, while construction demand has been rising along with economic growth in India and the Middle East. Sekisui Chemical also manufactures 40,000 t/yr of CPVC in Japan. Japan produced 1mn t of PVC during January-September, down by 4.9pc from the same period a year ago, according to Japan's Vinyl Environmental Council. Exports dropped by 4.8pc over the year to 428,118t during the period. By Nanami Oki Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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